Creative Plastering, Inc. v. Hedley Builders, Inc.

[1664]

Opinion

PETERSON, P. J.

In this case, we will hold a court lacks the authority to rule that an arbitrator, who is given the right to decide all matters in question arising out of or relating to a contract dispute, exceeds his powers in ruling which arbitrating party prevailed for purposes of awarding attorney fees the contract allows.

I. Factual and Procedural Background

In July 1990, appellant Creative Plastering, Inc. (CPI) entered into a subcontract with respondent Hedley Builders, Inc. (Hedley) whereby CPI agreed to perform lath and plaster work at a shopping center. During the course of construction, a dispute between CPI and Hedley arose, so the parties submitted the dispute to arbitration pursuant to a clause in the subcontract.

1

The principal issue at the arbitration was the amount owing under the subcontract. CPI claimed Hedley had unjustifiably withheld payment for the work it had performed and it sought the amount due under the subcontract, $13,099.60. Hedley stipulated that this was the amount owing under the subcontract, but it claimed it owed nothing to CPI because CPI had unjustifiably delayed completing its work. Accordingly, Hedley sought $22,176 in delay damages from CPI. In response, CPI claimed the delay was justified because it occurred during an extended period of freezing weather, and plaster cannot be applied when the temperature is too cold.

After considering this evidence, the arbitrator found in favor of CPI, awarding it $11,251 under the subcontract and $1,549 in interest. In addition, the arbitrator ruled CPI was the prevailing party in the dispute and that it was, thus, entitled to $11,178 in attorney fees under a clause of the subcontract.

2

Hedley then filed a petition in the San Mateo Superior Court seeking to vacate or, in the alternative, to modify the arbitration award. As is pertinent

[1665]